Romania: Oil exploration and production companies protest over increase of fee for transport of extracted oil

16. February 2016. / SEE Energy News

Increased fee charged for transport of oil extracted from exploration blocks will strongly affect domestic producers, in the context in which oil prices are at record low levels, and will facilitate increase in imports of oil and petroleum products, according to a release of the Romanian Association Companies Petroleum Exploration and Production (ROPEPCA).

“I learned from the press on the new order on domestic oil transport tariff. We are surprised that the process of debate and public consultation, as was initiated in January 2016 was not completed according to the timetable proposed and agreed by all parties involved in the dialogue. Clearly, ANRM decision contradicts one of the first priorities undertaken by the Ministry of Energy, and that is to support domestic production, “said Artur Stratan, the president of ROPEPCA.

From the perspective ROPEPCA, Romanian oil sector will be hard hit by rising transport tariffs in a context unfavorable crude price and taxation of operations. Additional pressure brought with tariff increase to nearly 80 lei per ton of oil transported by pipeline may threaten the survival of an entire economic sector and create a dangerous precedent for future similar actions.

“The increase by more than 1.4% of the service’s internal transport crude oil and associated products and services more expensive to transport imported crude oil will increase by more than 1 million euros, compared to last year, the amounts paid by domestic producers hydrocarbon for this service, although production is declining trading price continues to be unsustainable levels and tax is maintained at higher rates than the European average, “the statement said.

The increase is likely to further erode the competitiveness of domestic oil production, given that the only decreasing crude oil prices caused transportation tariff weight increase of 3% from the barrel in 2014 to over 7.5% at current prices. Such a measure could boost crude imports, given that the trade deficit increased by 38% in 2015 compared to 2014, warned representatives of the oil companies.

They showed that, from year to year, the amount of oil transported of domestic production decreases, a trend accentuated by the general climate of global hydrocarbon sector, which affects Romania. In the opinion of the member companies of ROPEPCA transportation system of crude oil and associated products through pipelines Conpet may represent an alternative commercially viable and effective from road or rail, as long as the tariff level, the territorial expansion of pipelines and quality of services take into account the general economic climate and the specific conditions of the market.